The FASB has issued an Exposure Draft for public comment that is intended to improve disclosures about a public entity’s reportable segments and provide more detailed information about a reportable segment’s expenses. The Exposure Draft would apply to public entities, which are entities that have issued debt or equity securities or are a conduit bond obligor for conduit debt securities that are traded in a public market, or are required to file financial statements with the Securities and Exchange Commission, or provide financial statements for the purpose of issuing any class of securities in a public market.

In accordance with Topic 280, Segment Reporting, public entities are required to disclose certain information regarding the operations of reportable segments, such as revenue, profit and loss, and certain expenses such as depreciation and amortization, interest, and income tax expense. The Exposure Draft would:

• Require that a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss
• Require that a public entity disclose, on an annual and interim basis, an amount for other segment items by reportable segment and a description of the composition of other segment items. The other segment items category is the difference between reported segment revenue less significant segment expenses and reported segment profit or loss.
• Requires public entities to provide all annual disclosures about a segment’s profit or loss and assets currently required by Topic 280 in interim periods.
• Clarifies that a public entity is not precluded from reporting additional measures of a segment’s profit or loss that are used by the CODM. However, the entity is still required to report the segment’s profit or loss that is most consistent with the measurement principles under generally accepted accounting principles.
• Requires that a public entity that has a single reportable segment provide all the disclosures required by the amendments in this Exposure Draft and all existing segment disclosures in Topic 280.

The effective date of the Exposure Draft has not yet been determined. The Exposure Draft would be applied retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods would be based on the categories and disclosed in the period of adoption. Comments on the Exposure Draft are due by December 20, 2022.

The full text of the Exposure Draft is available here.

^{Readers should not act upon information presented without individual professional consultation.}